Correlation Between EMedia Holdings and CoreShares Preference

Can any of the company-specific risk be diversified away by investing in both EMedia Holdings and CoreShares Preference at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining EMedia Holdings and CoreShares Preference into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between eMedia Holdings Limited and CoreShares Preference Share, you can compare the effects of market volatilities on EMedia Holdings and CoreShares Preference and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in EMedia Holdings with a short position of CoreShares Preference. Check out your portfolio center. Please also check ongoing floating volatility patterns of EMedia Holdings and CoreShares Preference.

Diversification Opportunities for EMedia Holdings and CoreShares Preference

0.0

Correlation Coefficient

EMedia Holdings  CoreShares Preference

Pay attention - limited upside

The 3 months correlation between EMedia and CoreShares is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding eMedia Holdings Limited and CoreShares Preference Share in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CoreShares Preference and EMedia Holdings is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on eMedia Holdings Limited are associated (or correlated) with CoreShares Preference. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CoreShares Preference has no effect on the direction of EMedia Holdings i.e., EMedia Holdings and CoreShares Preference go up and down completely randomly.

Pair Corralation between EMedia Holdings and CoreShares Preference

Assuming the 90 days trading horizon eMedia Holdings Limited is expected to generate 117.38 times more return on investment than CoreShares Preference. However, EMedia Holdings is 117.38 times more volatile than CoreShares Preference Share. It trades about 0.06 of its potential returns per unit of risk. CoreShares Preference Share is currently generating about -0.01 per unit of risk. If you would invest  37,365  in eMedia Holdings Limited on October 7, 2024 and sell it today you would lose (1,365) from holding eMedia Holdings Limited or give up 3.65% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

eMedia Holdings Limited  vs.  CoreShares Preference Share

eMedia Holdings

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in eMedia Holdings Limited are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, EMedia Holdings exhibited solid returns over the last few months and may actually be approaching a breakup point.

CoreShares Preference

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CoreShares Preference Share has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong technical and fundamental indicators, CoreShares Preference is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with EMedia Holdings and CoreShares Preference

The main advantage of trading using opposite EMedia Holdings and CoreShares Preference positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EMedia Holdings position performs unexpectedly, CoreShares Preference can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in CoreShares Preference will offset losses from the drop in CoreShares Preference's long position.

The idea behind eMedia Holdings Limited and CoreShares Preference Share pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.